Do Governance Indicators Explain Development Performance? A Cross-Country Analysis
Developing Asian countries with a surplus in government effectiveness, political stability, regulatory quality, and corruption control are observed to grow faster than those with a deficit in these indicators.
Using a cross-country analysis from 1998 to 2011, this study finds that government effectiveness, political stability, control of corruption, and regulatory quality have more significant impact on country growth performance than voice and accountability, and rule of law. Countries with a surplus on the former four indicators are observed to grow faster by as much as 2.5 percentage points annually. The results suggest that governance matters for development but may vary across dimensions of governance and a country’s stage of development.
- A Literature Review on Governance and Development Performance
- Methodology and Data
- Governance Scores: World by Region and Developing Asia by Subregion
- Empirical Results for Surplus-Deficit Analysis
- Empirical Results for the Panel Data Analysis
- Summary, Conclusions, and Policy Implications